AMERICAN technology companies have resumed selling certain products to Huawei Technologies Co. after concluding there are legal ways to work with the Chinese telecom giant in spite of its inclusion on a Trump Administration blacklist.

Micron Technology Inc., the largest U.S. maker of computer memory chips, said Tuesday that it had started shipping some components to Huawei after its lawyers studied export restrictions. Intel Corp., the largest microprocessor maker, has also begun selling to Huawei again, according to a person familiar with the matter. It’s not clear how many other suppliers have reached the same conclusion.

The U.S. Commerce Department added Huawei last month to what’s known as an entity list, a move designed to bar the Chinese company from buying American components and software. Officials at the U.S. Commerce Department and the White House are frustrated that companies have resumed Huawei shipments, according to another person familiar with the matter. The White House didn’t immediately respond to a request for comment.

The chipmakers are taking advantage of certain exceptions to the export restrictions. Even when companies have headquarters in the United States, they may be able, through ownership of overseas subsidiaries and operations, to classify their technology as foreign, according to Cross Research analyst Steven Fox. If less than 25 percent of the technology in a chip originates in the United States, for example, then it may not be covered by the ban, under current rules.

“It took them weeks to figure this out,” Fox said. “What they did was look at the laws and the rules and applied them to their business.”

Micron has operations all over the world, some added through acquisitions, and it owns plants in Singapore and Japan. Intel has factories in China and Ireland and a major design center and production facility in Israel. The company declined to comment.

Companies like Micron and Intel can legally continue some shipments to Huawei under what’s known as the de minimis rule, says Kevin Wolf, former head of the Commerce Department’s export control section.

“Commodities made overseas from U.S.-origin technology are only subject to the entity list prohibitions if the technology and commodity are sensitive items controlled for ‘national security’ reasons,” Wolf said. “But a commodity made overseas from less sensitive U.S.-origin technology is not subject to the entity list prohibitions.”

National security hawks in the Trump Administration thought that inclusion on the entity list would ratchet up pressure on Huawei, but they didn’t understand or misinterpreted the existing rules, people familiar with internal deliberations said. Those advisers didn’t fully grasp the limits of export controls in constricting supply chains that reach deeply into China.

Micron chief executive officer Sanjay Mehrotra, in a conference call discussing his company’s earnings Tuesday, declined to explain his analysis, despite repeated questions. In a brief interview after the call, he also wouldn’t elaborate and said he hopes the United States and China quickly resolve their trade dispute.

The Semiconductor Industry Association (SIA) trade group put out a statement aimed at supporting its members’ right to keep working with an important customer: “SIA companies are committed to rigorous compliance with U.S. export control regulations. As we have discussed with the U.S. government, it is now clear some items may be supplied to Huawei consistent with the Entity List and applicable regulations.”

The trade war and Huawei sanctions put U.S. chipmakers in a tough position. They need to comply with new rules in their home country, while at the same time navigating the intricacies of business in China. More than 60 percent of the US$470 billion in chips sold last year went through China.

Even though these companies have found ways to legally keep exporting some of their products to Huawei, they are prohibited from providing post-sale support like software updates, repairs or installation help. That means that while an item in a box can be shipped from Taiwan to the Chinese mainland, for example, the company still can’t provide information on software repairs or assistance from Silicon Valley. Wolf said that, in his experience, that can be a significant handicap. (SD-Agencies)